Outside-In Thinking Identifies Growth Opportunities

Outside-in thinking means that we look at a situation through another person’s eyes—the lens of the customer we are trying to serve. When you make decisions solely on how well it works for you and for your own organization, you might be missing a very important point of view. How does the situation appear to your customer?

If you are going to strike off in a new direction, you will want to be confident that whatever problem you are solving and whatever solution you are proposing are validated in the market you are trying to serve. Confidence comes from having great market intelligence from an “outside-in” perspective. Confidence is a key enabler in making bigger, bolder decisions. Which is why it is a fundamental requirement of GrowthDNA. Read more about GrowthDNA here.

The first strand of GrowthDNA – Confidence – comes from basing a vision and strategy on data about your market. Real confidence in the direction you are taking requires reliable, current information about your customers’ points of view.

What does your customer want?

A strategy that leads to growth is not about right or wrong; it is about delivering against expectations established by the industry as a whole, and your brand specifically. It is about using outside-in thinking to understand what your customer wants or needs that you can provide.

On an online chat forum for business travelers, the question of how hotels respond to online criticisms was raised. What do travelers do if their complaints receive a generic response? Most agreed they just don’t return to the hotel—a passive response and the hotel may never know they just lost a customer through their action, or rather, lack thereof. A hotel manager posted his thoughts reminding us how hard it was to address every concern, particularly when location managers don’t have control of things like street noise, construction, or when the air conditioning goes out. He also noted that many people don’t complain at the hotel and save their comments for travel sites, leaving him with little opportunity to respond; and there are so many travel sites he can hardly keep up. Can you relate to his tale?

Undoubtedly. If you are a guest at his hotel, however, and failed to be able to sleep the night before a big presentation because of a noisy family in the room above you, does it make a difference that the manager explained why they couldn’t move your room or enforce quiet hours? Probably not. You didn’t choose that hotel with the expectation of lying awake tossing and turning the night before a big career opportunity. While you might understand, it doesn’t make the issue go away. Did you pay for a hotel room or for a good night’s sleep? Too often companies forget that they are not selling the thing (eg,a hotel room) but meeting a need (a good night’s sleep).

Customers want creative solutions, not efficient ones

In an article published in Harvard Business Review titled, “Managers Reject Ideas Customers Want,” Professor Jennifer Mueller of the University of San Diego shared the results of a study on new product development. Customers and executives were asked to rate each idea on creativity, feasibility, and profitability. The bottom line? Customers wanted the most creative ideas. The company leaders are choosing feasible ones. Mueller explains that the “focus on feasibility can make it harder to even recognize when ideas are creative.” She is describing the difference between outside-in (what the customer sees value in) and inside-out (what matters to the efficiency of the company).

Mueller goes on to say, “In one study we primed people with a ‘how’ mind-set, asking them to describe how to do things, or a ‘why’ mind-set, asking them to describe why they did things. People with the ‘how’ mind-set, which is highly related to feasibility concerns, rated innovative ideas as less creative than those with a ‘why’ mind-set did.” New ideas can involve more unknowns, which is at odds with the desire for ROI and metrics. Steve Jobs had the “why” mindset, asking his people to do the “new thing” without regard to how Apple would make it happen. The challenge isn’t that we aren’t generating creative, innovative ideas—we aren’t choosing them.

Are you looking outside-in?

So, take a look at your current strategy using outside-in thinking. How would your actions appear to your customers? Are the products and services you offer meeting their current needs? Are they available for a price they are willing to pay? If you plan to grow by reaching a new demographic, do you know their approach to the problem you are solving for them? If you don’t know, then you are lacking confidence in your information and are not looking outside-in on a regular basis.

It is imperative that leaders lead from the outside-in as it is the view that correlates to the successful navigation of next-stage growth opportunities with a result of accelerated and profitable growth.